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The £8 billion UK pension fund for the bank Santander has joined the select group of pension funds looking to profit from hedge fund fees, instead of paying them out.

The Santander UK Group Pension Scheme has made a $100 million commitment to Dyal Capital Partners, a Neuberger Berman-owned fund founded in 2010, whose strategy is to buy minority stakes in hedge funds.

Santander stopped allocating assets to hedge fund managers in early 2013, believing they were too small to make a financial difference to the fund.

Antony Barker, head of pensions at Santander, said: "We’ve largely divested the hedge funds we had, but reinvested the capital in the equity of hedge fund managers, one of the first European pension funds to do so I believe. Following the money as it were."

Neuberger Berman declined to comment.

Barker said the switch in strategy – from investing in hedge funds, to investing in the companies that manage hedge funds – was not necessarily aimed at reducing costs.

The chief investment officer of another large UK pension fund said: "Two & 20 or anything close to it is very poor value in a low-growth environment. They can expect further pressure. My eye is drawn to the 75bps threshold which I regard as just about acceptable for expensive managers.

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"But when the Minsky moment [a collapse in asset values] comes, as it always does, the decent hedge funds will make a lot of money and the sellers will be buyers again."

Barker said: "I don’t have an issue paying performance fees, the challenge is paying for skill rather than luck – although I also sympathise with a Napoleonic request for lucky generals."

Dyal Capital Partners was founded in 2010, and as of mid-2012 had raised $1.3 billion to "purchase minority equity interests in a portfolio of approximately 12-15 institutional hedge fund management companies", according to a statement at the time.

It usually takes stakes of up to the 20% level in hedge fund companies, according to its website. It also invests in private equity managers.

It has also had support from other pension funds. In the US, the public state workers' fund for New Jersey has committed around $450 million to Dyal.

In the UK, the Santander pension fund is known for its dynamic investment approach. In 2013, it embarked on a programme to increase alternative investments from around 10% of assets to about a quarter "in the next few years".

In May, the bank was named Scheme Sponsor of the Year at the Financial News pensions award, after agreeing to keep the defined-benefit scheme open for the next few years, despite the financial challenges this presents for banks hit by strict new capital regulations.